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Banking Interpretations

NYSBL 142 and 143-b

September 26, 1988

To: Examiner Cox Domestic Commercial Banks Division

From: M. Schussler

Re: [ ] Bank – [ ] Investments, Inc.

[ ] Investments, Inc. a Liberian subsidiary of [ ] Limited acting as nominee for its parent, owns approximately 21.8% of the stock of [ ] Bank. The shares had been pledged as security for loans obtained from [ ]. [ ] has submitted a request for a ruling pursuant to Banking Law s143-b(1) that the ownership of the shares does not constitute control of [ ] Bank.

In support of its contention, [ ] notes the existence of a group that owns approximately 45.8% of [ ]'s stock and is acitve in the management of [ ] nor attempts to influence its policies and expresses its intention not to seek to influence the management or policies of [ ]. It intends merely to hold the stock until a purchaser can be found.

The arguments presented by [ ] together with its representations about its future intentions are sufficient to support a finding that it does not exercise control of [ ]. Any change in circumstances (e.g., a shift in ownership, and active involvement by [ ] in the affairs of [ ] may require that the issue be revisited. Furthermore, this finding that [ ] is not currently a control party has no bearing on the status of any person to whom the stock may be transferred.


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